Sri Lankan Customs Failed to Collect Nearly 57.6 Billion Rupees in VAT on Vehicles in 2025

Sri Lanka’s National Audit Office says Customs had not collected nearly 57.6 billion rupees in VAT by the end of 2025 on vehicles assembled and released from six customs warehouses. The vehicles represented about 178.8 billion rupees in VAT obligations.

The audit office said Customs had released 94,941 vehicles into the market. Under Section 84A(1) of the Customs Ordinance, goods manufactured or assembled in a warehouse must be treated as imported when released, with duties calculated and paid at that stage.

The audit also identified delays involving goods seized for various reasons and held in Customs yards. Authorities had not arranged the sale of 1,051 containers containing perishable goods, including 393 containers that had been held for more than five years.

The report said the 1,869 detained containers should have been handled appropriately as soon as possible under Sections 135 and 162 of Customs Ordinance No. 17 of 1869. It specifically required perishable goods to be sold. The audit described the failure to act as an irregular transaction.

The findings appear in the audit report included in Sri Lanka Customs’ 2025 annual report.